Tianneng Power International : CONNECTED TRANSACTION FORMATION OF JOINT VENTURE COMPANY

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TIANNENG POWER INTERNATIONAL LIMITED

天 能 動 力 國 際 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 00819)

CONNECTED TRANSACTION

FORMATION OF JOINT VENTURE COMPANY

FORMATION OF JOINT VENTURE COMPANY

The Board is pleased to announce that on 31 December 2019, Tianneng Holding (an indirect wholly-owned subsidiary of the Company) and Tianchang Holding (a connected person of the Company) entered into a JV Arrangement pursuant to which the parties agreed to establish the JV Company in the PRC.

Tianneng Holding and Tianchang Holding expect to invest a total of RMB50,000,000 into the JV Company by contributing to its registered capital. Tianneng Holding and Tianchang Holding have agreed to contribute RMB30,000,000 and RMB20,000,000, representing 60% and 40% of the registered capital of the JV Company, respectively.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Tianchang Holding's equity interest is owned as to approximately 95% and 5% by Dr. Zhang and Mr. Zhang, respectively. Dr. Zhang is a controlling shareholder and an executive Director of the Company and Mr. Zhang is a son of Dr. Zhang. Accordingly, Tianchang Holding is an associate of Dr. Zhang and a connected person of the Company pursuant to the Listing Rules. As a result, the entering into of the JV Arrangement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

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As all of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the JV Arrangement exceed 0.1% but are less than 5%, the JV arrangement and the Transaction will be subject to the annual review and disclosure requirements but exempt from the independent Shareholders' approval requirements as set out in Chapter 14A of the Listing Rules.

The Board is pleased to announce that on 31 December 2019, Tianneng Holding (an indirect wholly-owned subsidiary of the Company) and Tianchang Holding (a connected person of the Company) entered into a JV Arrangement pursuant to which the parties agreed to establish the JV Company in the PRC. The major terms of the JV Arrangement are set out as follows:

THE JV ARRANGEMENT
Date:	31 December 2019
Parties:	Tianneng Holding; and
	Tianchang Holding.
Scope of Business:	The scope of business of the JV Company is the provision
	of factoring financing services, management of sales
	ledger, accounts receivable collection and provision of non-
	commercial bad debt guarantee (subject to the business scope
	finally approved by the relevant Industrial and Commercial
	Administration Department in the PRC).
Registered Capital:	The total registered share capital of the JV Company will
	be RMB50,000,000. Tianneng Holding and Tianchang
	Holding have agreed to contribute RMB30,000,000 and
	RMB20,000,000, representing 60% and 40% of the registered
	capital of the JV Company, respectively. The capital
	contributions will be payable by the parties in cash upon
	establishment of the JV Company.
	The capital requirement of the JV Company was determined by
	arm's length negotiation between the parties taking into account
	the development plans of the JV Company.

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Profit Sharing:	Any profit or loss of the JV Company shall be shared or borne
	by Tianneng Holding and Tianchang Holding in proportion to
	their respective equity interests in the JV Company.
Body of Authority:	The shareholders in general meeting of the JV Company will
	be the JV Company's body of highest authority. Any decision
	of the JV Company may be passed by a resolution representing
	more than 50% of the shareholders' voting rights except that
	amendment of articles of association, alteration of registered
	capital, or consolidation, merger, dissolution or alteration of
	the form of the JV Company, requires a resolution representing
	two-thirds or more of the shareholders' voting rights.
Director and Supervisor:	The JV Company will have one executive director and such
	director will be nominated and appointed at the general meeting
	of the JV Company. The director will be appointed for a term of
	three years, subject to re-election at the expiration of the term
	of office at the general meeting of the JV Company.
	The JV Company will also have one supervisor, who will be
	nominated and appointed at the general meeting of the JV
	Company. The supervisor will be appointed for a term of three
	years, subject to re-election at the expiration of the term of
	office at the general meeting of the JV Company.

The Company will finance its capital commitment in the JV Company from its internal resources. Save as disclosed above, the Company has no other capital commitment to the JV Company as at the date of this announcement.

As at the date of this announcement, the JV Company has not yet been established and thus has not commenced any business operations. As Tianneng Holding will hold 60% equity interest in the JV Company, the JV Company will be accounted for as a subsidiary of the Company and hence, it will be included into the Group's consolidated financial statements.

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REASONS FOR AND BENEFITS OF THE ESTABLISHMENT OF THE JV COMPANY

The Group focuses primarily on research and development, production and sales of high-end eco- friendly batteries, new energy batteries, green renewable materials and their related products. The investment in the JV Company is in line with the Group's long-term corporate strategy and potential business transformation. The formation of the JV Company is a major step of the Company to meet the increasing demands of commercial factoring services from its business partners. Through the provision of commercial factoring, receivables management, credit-standing investigation, financial guarantees and other related services, the JV Company will be able to offer comprehensive financial solutions to both upstream and downstream business partners of the Group, and therefore increase the profitability and core competitiveness of the Group. Through cooperating with Tianchang Holding under the JV Arrangement, the Group will be able to leverage on the strengths and financial resources of Tianchang and to diversify the risk of carrying out commercial factoring and related businesses.

The Board (including the independent non-executive Directors) believes that the terms of the JV Arrangement and the Transactions are fair and reasonable, are on normal commercial terms and in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board has approved the entering into of the JV Arrangement and the Transactions. Except for Dr. Zhang, a controlling shareholder and an executive Director of the Company who owns approximately 95% equity interest of Tianchang Holding, none of the Directors have a material interest in the Transaction or was required to abstain from voting on the relevant resolutions of the Board.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Tianchang Holding's equity interest is owned as to approximately 95% and 5% by Dr. Zhang and Mr. Zhang, respectively. Dr. Zhang is a controlling shareholder and an executive Director of the Company and Mr. Zhang is a son of Dr. Zhang. Accordingly, Tianchang Holding is an associate of Dr. Zhang and a connected person of the Company pursuant to the Listing Rules. As a result, the entering into of the JV Arrangement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As all of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the JV Arrangement exceed 0.1% but are less than 5%, the JV arrangement and the Transaction will be subject to the annual review and disclosure requirements but exempt from the independent Shareholders' approval requirements as set out in Chapter 14A of the Listing Rules.

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GENERAL INFORMATION ON THE PARTIES

The Company and the Group

The Company is a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the Main Board of the Stock Exchange (Stock Code: 00819) and is principally engaged in investment holding business. The Group focuses primarily on research and development, production and sales of high-endeco-friendly batteries, new energy batteries, green renewable materials and their related products.

Tianneng Holding

Tianneng Holding is a company incorporated in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company. It is principally engaged in investment holding, provision of investment management, enterprise management consulting and investment advisory services, and sales of metal materials, construction materials, metal appliances, batteries production equipment and related products.

Tianchang Holding

Tianchang Holding is a company incorporated in the PRC with limited liability, and a connected person of the Company for the reasons set out in the paragraph "Listing Rules Implications" above. The principal activities of Tianchang Holding are assets and equity investments, provision of enterprise management advisory services and related businesses.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the meaning ascribed to them below:

"Board"	means the board of Directors
"Company"	means Tianneng Power International Limited, a company
	incorporated under the laws of the Cayman Islands with limited
	liability and whose shares are listed and traded on the main
	board of the Stock Exchange
"connected person(s)"	has the meaning ascribed to such term in the Listing Rules

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"controlling shareholder(s)"	has the meaning ascribed to such term in the Listing Rules
"Director(s)"	means the director(s) of the Company
"Dr. Zhang"	means Dr. Zhang Tianren (張天任), a controlling shareholder
	and an executive Director of the Company
"Group"	means the Company and its subsidiaries
"JV Arrangement"	means the joint venture arrangement entered into between
	Tianneng Holding and Tianchang Holding in respect of the
	formation of the JV Company
"JV Company"	means Tianneng (Tianjin) Commercial Factoring Co., Ltd.*
	(天能(天津)商業保理有限公司), a limited company to be
	incorporated under the laws of the PRC pursuant to the JV
	Arrangement, whose name is subject to approval by the relevant
	PRC government authorities
"Hong Kong"	means the Hong Kong Special Administrative Region of the
	PRC
"Listing Rules"	means the Rules Governing the Listing of Securities on The
	Stock Exchange of Hong Kong Limited
"Mr. Zhang"	means Mr. Zhang Hao (張昊), a son of Dr. Zhang
"PRC"	means the People's Republic of China, which for the purpose
	of this announcement only, excludes Hong Kong, the Macau
	Special Administrative Region of the PRC and Taiwan
"RMB"	means Renminbi, the lawful currency of the PRC
"Tianchang Holding"	means Tianchang Holding Co., Ltd.* (天暢控股有限公司), a
	limited partnership established under the laws of the PRC, and
	as at the date of this announcement whose equity interest is
	owned as to approximately 95% and 5% by Dr. Zhang and Mr.
	Zhang, respectively

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"Tianneng Holding"	means Tianneng Holding Group Co., Ltd.* (天能控股集團
	有限公司), a company incorporated in the PRC with limited
	liability and an indirect wholly-owned subsidiary of the
	Company
"Shareholder(s)"	means holder(s) of the share(s) of the Company from time to
	time
"Stock Exchange"	means The Stock Exchange of Hong Kong Limited
"Transaction"	means the transactions contemplated under the JV Arrangement
"%"	means per cent

• The English name is a translation of its Chinese name and is included for identification purposes only.

By Order of the Board

Tianneng Power International Limited

Zhang Tianren

Chairman

Hong Kong, 31 December 2019

As at the date of this announcement, the executive directors of the Company are Dr. ZHANG Tianren, Mr. ZHANG Aogen, Mr. ZHANG Kaihong, Mr. SHI Borong, and Mr. ZHOU Jianzhong; the independent non-executive directors of the Company are Mr. WU Feng, Mr. HUANG Dongliang and Mr. ZHANG Yong.

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